06 Jan 7 Key Benefits Of AI For Business
McKinsey & Co.’s 2020 Global AI Survey found that 22% of AI-using companies reported that the technology contributed more than 5% of their 2019 earnings before interest and taxes. Moreover, the majority of business functions employing AI technologies saw an increase in AI-generated revenue year over year. In response to the COVID-19 pandemic, the AI-profitable companies told McKinsey they intended to increase AI investments.
Business process efficiency tends to top enterprise users’ lists of benefits (see below). According to Deloitte’s latest “State of AI in the Enterprise” report, the value business leaders seek to derive from AI varies based on a company’s maturity in deploying AI technologies. On a list of AI benefits, “beginner” AI users ranked cost reduction second to process efficiency, whereas “advanced” AI users prioritised developing new products and services.
Here are seven significant benefits of AI for businesses, along with some industry-specific illustrations.
- Gains In Efficiency And Productivity
Gains in efficiency and productivity are two of the most frequently cited advantages of implementing AI in the workplace. The technology performs tasks at a rate and on a larger scale than humans. In addition, by removing these responsibilities from human workers, AI enables them to focus on higher-value tasks that technology cannot perform. This allows organisations to minimise the costs associated with mundane, repetitive tasks that can be performed by technology while maximising their human capital.
Beena Ammanath, executive director of the Deloitte AI Institute, stated that chief information officers (CIOs) must identify areas where artificial intelligence (AI) can assist functions in accomplishing more with less time and fewer resources in order to [improve] the experience for both employees and users.
- Accelerated Pace Of Business
Karen Panetta, a fellow of the technical professional organisation IEEE and a professor of electrical and computer engineering at Tufts University, stated that AI will enable businesses to move even more rapidly in the digital age. AI enables shorter development cycles and reduces the time required to move from design to commercialization, which in turn yields a better and more immediate return on investment (ROI) on development dollars.
- Expanding New Capabilities And Business Model
Chris Brahm, senior partner at Bain & Company and leader of the company’s global Advanced Analytics practise, stated that AI can be utilised by executives for business model expansion. Using the reams of data they collect, autonomous vehicle companies could identify new revenue streams related to insurance, while an insurance company could apply AI to its vast data stores to enter fleet management.
- Enhanced Customer Service
According to Seth Earley, author of The AI-Powered Enterprise and CEO of Earley Information Science, delivering a positive customer experience has become a business necessity.
Earley stated, “We’re attempting to incorporate everything we know about the customer, the customer’s needs, our solutions, and the competition, and then provide the customer with what they require when they require it.” It would be fantastic if we had a salesperson who could do that for everyone, but we don’t.
AI, however, can do all of the above and more, resulting in more customised and individualised interactions between businesses and each customer.
- Enhanced Surveillance
Ammanath stated that organisations can implement near-instantaneous monitoring capabilities that can alert them to issues, recommend action, and in some cases even initiate a response due to AI’s ability to take in and process massive amounts of data in real time.
Using information gathered by devices on factory equipment, AI can, for instance, identify problems in those machines and predict when maintenance will be required, thereby preventing costly and disruptive breakdowns and the cost of maintenance work performed because it was scheduled rather than because it was clearly needed.
AI’s monitoring capabilities can be similarly effective in other domains, such as enterprise cybersecurity operations that require the analysis and comprehension of vast amounts of data.
- Improved Quality And Reduced Human Error
According to Madhu Bhattacharyya, managing director and global leader of Protiviti’s Enterprise Data and Analytics practise, organisations can anticipate a reduction in errors and a stronger adherence to established standards when they implement AI technologies into their processes. When AI and machine learning are combined with a technology such as RPA, which automates repetitive, rules-based tasks, the combination not only speeds up processes and reduces errors, but it can also be trained to improve and take on more complex tasks.
The use of AI in financial reconciliation, for instance, would produce error-free results, whereas the same reconciliation, even partially handled by human employees, is prone to error. “Can AI help maintain higher quality? Yes, you can, “Bhattacharyya said.
- Better Talent Management
Many facets of talent management are being enhanced by artificial intelligence, from streamlining the hiring process to eliminating bias in corporate communications. Katherine Jones, an independent consultant, stated in an article about the increasing use of AI in recruitment that AI-enabled processes not only save companies money on hiring costs, but also increase workforce productivity by effectively sourcing, screening, and identifying top-tier candidates. As natural language processing tools have advanced, companies are also utilising chatbots to provide a personalised experience for job candidates and to mentor employees. In addition, AI tools are used to gauge employee sentiment, identify and retain top performers, and determine fair compensation.
In addition to the aforementioned advantages, AI can facilitate numerous industry-specific enhancements. Shervin Khodabandeh, managing director and senior partner at Boston Consulting Group and co-leader of its AI business in North America, provided the following three examples:
Using AI, retailers can better target their marketing efforts, create a more efficient supply chain, and calculate optimal pricing for maximum returns. In retail businesses where humans perform the majority of the work, AI will aid in predicting customer needs and staffing levels.
Using this technology, the pharmaceutical industry can perform drug-discovery data analysis and predictions that are impossible with conventional technologies.
It is important to keep in mind that as businesses discover ways to use AI for competitive advantage, they are also facing obstacles. Concerns include AI bias, government regulation of AI, data management for projects requiring machine learning, and talent shortages. Moreover, according to research conducted by MIT Sloan Management Review and Boston Consulting Group, financial gains can be elusive if the necessary talent and infrastructure for AI are lacking.
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